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Dividend reinvestment plans (DRPs) are a great way to increase your investment in a company. They allow you to buy more shares without the costs of brokerage, and often at a small discount to the current market price. Whether you participate in a DRP mostly depends on your income needs. If you don't need the cash and you're comfortable reinvesting money in the company at its current price, you should participate.

There are, however, some extra calculations involved in assessing the Capital Gains Tax payable when you sell the stock. At The...

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